Gigabit Router, Switch Purchases Soar During 1Q00, IDC Says

FRAMINGHAM, MA – JUNE 12, 2000 — Gigabit Ethernet experienced a strong first quarter. According to IDC, which today released its worldwide quarterly LAN market results, Gigabit Ethernet switches soared almost 27% to 608,853 ports during 1Q00. The surge was partially driven by the plummeting average prices of Gigabit Ethernet switches, which fell more than 20% from 4Q99 to $878 per port. At the same time, sales of Gigabit and Terabit routers are up sharply. These significant changes are uncovered in IDC's quarterly LAN tracking service, QView.

 

"Major changes are afoot, starting in the first quarter of the new millennium. The world is turning to Gigabit Ethernet and away from LAN ATM," said Paul Strauss, senior analyst for Enterprise Networks Research at IDC. "Terabit routers are starting to be shipped in quantity, and in general the year is starting off with unfettered purchase rates of high-end LAN switches and routers.

"Although the average prices of many products are tumbling," Strauss said, "revenues of many LAN switch and most router sectors rose rapidly in the first quarter." This is particularly true of high-speed products. Shipments of both Gigabit LAN switches and Gigabit routers are surging. "Declining prices of Gigabit switch ports are stimulating this growth in the LAN switch area. By contrast, the average price of Gigabit routers is rising rapidly – to well over one hundred thousand dollars on average – but service providers are buying them with increased rapidity."

Key LAN equipment trends in the millennium's first quarter uncovered by IDC's QView service include:

— Quarterly worldwide router end-user revenue expanded to $2.53 billion, up more than 5% from 4Q99, a very high quarter-to-quarter growth rate.

— Quarterly worldwide LAN switch port shipments surged more than 5.0% from 4Q99, to 23.49 million ports.

— Purchases of Gigabit and Terabit routers jumped to 2,307 units, of which 49 were Terabit routers. This compares with 1,434 in 4Q99.

— Sales of pure 10Mbps Ethernet ports slumped, being replaced by 10/100 Mbps ports. While 5.19 million 10Mbps Ethernet ports shipped in 4Q99, there were less than 3.74 million shipped in 1Q00, a decline of 30%.

— Stricken by rising competition from Gigabit Ethernet, LAN ATM sales collapsed, with revenues falling 19.7% from 4Q99 and 38% from a year earlier. Shipments of LAN ATM ports fell 11.9% from 4Q99 and 22.2% from 1Q99.

— Shipments of inexpensive SOHO routers, routers costing less than $1,500 and usually designed for offices of 20 people or fewer, soared 20% from 4Q99, to 516,574 routers.

Supported by a team of IDC LAN market analysts located around the world, IDC's Worldwide LAN QView was launched in response to customer demand for timely, detailed, and accurate LAN equipment market results. It includes market reviews and supplier shares for the three major LAN equipment markets – LAN switches, routers, and hubs. Data is segmented by technology, form factor, function, region, price band, and customer, where applicable; delivered eight weeks after the close of a calendar quarter; and made available to clients in easy-to-review electronic format.

Developed and delivered under IDC's newly launched Worldwide LAN Qview service, this quarterly LAN market tracking data represents IDC's most up-to- the-minute insight into technology adoption, customer acceptance, and supplier performance within the major LAN equipment markets.

For more information on IDC's Worldwide LAN QView service, contact Jonathan Guloyan at 508-935-4296. To purchase the electronic copy of IDC's Worldwide LAN QView results, please contact Bruce Atlas at 1-800-343-4952 extension 4053 or by email at batlas@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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